Southeast Health Plans, Inc., which is a company that offers administrative services in the area of health plans, will be providing these services to self insured employers. The company will be focusing on employers with 50-50 employees. Many of these companies have an HMO, PPO, major national insurer health plans. Most employers with 500 employees and more have at minimum some self-insurance. But, this market is often ignored or overlooked by national insurance companies. Southeast Health Plans identified that more than 80% companies with 500 or more employees are self insured, however, less than 25% Atlanta area businesses with 50 to 500 employees are covered by self-insured plans.
Companies that are currently self insured as well as those that have other health plans will be able to switch to self insurance. Access to quality consultative and administrative services is a key factor in self-insurance. Southeast Health Plans, Inc.’s experienced management has formed a strategic alliance of Blue Cross/Blue Shield Pennsylvania’s subsidiary Blair Mill Administrator to offer first-class benefits management service to its target market.
Southeast Health Plans, Inc. will generate revenue exceeding $5 million over five years, and make a $1.6 million net profit after tax. The company will turn profitable in year three with after-tax earnings of $560 thousand. Margins as a marketing agency and service provider will be exceptional with gross margins exceeding 80% (less just sales incentive costs) & approaching 50% after all operating costs, once market penetration reaches maturity.
Southeast Plans, Inc.’s success lies in its ability to attract capital to market its services in the metropolitan Atlanta area and northern Georgia. Proper professional sales personnel is critical. It is then necessary to establish a solid formula for expansion in the Southeastern regions. Controlling costs, especially in relation to marketing and sales programs, will allow for controlled expansion that is fully financed by internal cash flow.
The company’s goals are:
- To create co-operative marketing with Blair Mill advertising executions using media in the Atlanta Metro Market.
- To hire sales staff, both identified and unidentified, to implement a sales follow-up strategy.
- To have at least 4,800 cumulative employees under management by the end of year one.
- To break even by the end year two with a net loss of less than $100,000. While increasing market share,
- To shift from earnings to year three and to improve gross margin contributions.
- To grow regionally, with sales and media personnel, to penetrate new markets and consolidate service capabilities.
- To continually achieve cost-savings through an expanding provider network without compromising patient care.
- To have over 98,000 employees under management at the end year five.
Southeast Health Plans, Inc. is dedicated to providing small and mid-size employers with a comprehensive benefits administration program that will enable employers to control health benefits costs while allowing employees within the plan to have access to quality health care. Southeast will provide the best quality health care to both its employees and clients by combining self insurance with stop-loss programmes and efficient plan management. Southeast will provide quality care at a fair cost.
1.3 Keys to Success
The keys to success in this business are:
- Marketing. Southeast Health Plans can be sold directly to employers or through independent agents and insurance brokers. Name recognition will be important among established programs. It is vital that media budgets remain under control and that closing ratios of no less than 5% per year are maintained.
- Quality of service. Blair Mill Administrations services are state-of the-art among small-employer provider providers. The Southeast Health Plans, Inc. management team, and their provider networks, will provide customer satisfaction.
Client satisfaction is essential to avoid client erosion and fight competition. Renewals should be at least 85% of existing clients.